The S&P 500 Has Hit 18 All-Time Highs This Year. What Could Possibly Go Wrong?

By: Jack Strulowitz

It’s mid-May, and the S&P 500 has already closed at a new all-time high 18 times this year. That’s roughly once a week since January. If you’ve been checking your portfolio and feeling pretty good about things, you should. But if there’s a voice in the back of your head whispering that this can’t last forever, well, you’re not alone.

Here’s the thing about all-time highs: they sound scary, but they’re actually incredibly normal. The S&P 500 has been hitting new records since its inception. In fact, according to S&P Global, since the index’s inception in 1957, the S&P 500 has hit over 1,300 all-time highs, which works out to roughly once every 19 days. So when someone tells you the market is “at all-time highs” like it’s a warning sign, what they’re really telling you is that the market is doing what it has always done. It goes up over time. It sets new records along the way. And if that sounds too simple, it’s because it kind of is.

But try telling that to someone who remembers 2008.

If you’re over 50 and you lived through the financial crisis, you carry that experience with you whether you realize it or not. It rewired the way a lot of people think about markets. A good year in the market almost makes it worse, because all you can think about is when the rug gets pulled out. You start looking for the trap. You hear about Iran, tariffs, inflation, political uncertainty, and suddenly that little voice gets louder. “Maybe I should take some money off the table.” “Maybe I should move to cash.” “Maybe I should wait for things to settle down.”

The problem with waiting for things to settle down is that things never really settle down. There is always something. If you go back through every year the market hit new highs, you’ll find wars, recessions, political crises, pandemics, and more. The market didn’t wait for calm seas to keep climbing. It climbed in spite of the chaos, not because of its absence. The people who sat on the sidelines in 2012 because it “felt too high” watched the market more than triple over the next decade. The people who panicked during COVID and moved to cash in March 2020 missed one of the fastest recoveries in history.

Waiting for the perfect time to invest is a lot like telling yourself you’ll only have one slice of cheesecake on Shavuos. It sounds reasonable in theory, but it ignores everything we know about how things actually play out. There’s always another slice, and there’s always another reason to wait for the perfect buying opportunity. The people who kept waiting for a pullback that made sense to them ended up watching from the sidelines while everyone else was already at the table.

Now, does that mean you should ignore risk entirely? Of course not. Things can and do go wrong. Markets drop, sometimes significantly, and anyone who tells you otherwise is either lying or selling something. But there’s an enormous difference between having a plan for when the market drops and trying to predict when it will. Planning is a strategy. Predicting is a coin flip. And flipping coins with your retirement savings is not a game most people can afford to play.

Nobody can tell you whether the market is too high. But what you can figure out is whether your financial plan accounts for both possibilities: the market continuing to rise, and the market taking a hit. If you have a plan that works in both scenarios, the daily headlines stop mattering as much. You stop reacting to what your brother-in-law said about that hot stock. You stop refreshing your brokerage app every time Fox News runs a segment about geopolitical tension. You just follow the plan.

At the end of the day, the market hitting all-time highs should be good news. And for people with a plan, it is. They’re not losing sleep over what Iran might do next or rethinking their entire portfolio every time a headline sounds scary. They have a plan that works whether the market keeps climbing or takes a hit, and that plan gives them something no stock ticker ever will: the confidence to stop worrying and actually live their life.

That’s what good financial planning is supposed to do. Not predict the future, but make you less afraid of it. 

Jack Strulowitz is a Financial Advisor at Bernath & Rosenberg in Cedarhurst, NY, where he helps high-net worth individuals and families manage their investments and build comprehensive strategies for retirement, tax, and estate planning. For questions or to schedule a consultation, please contact [email protected] or 847-962-3352.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.

Investing involves risk including loss of principal. No strategy assures success or protects against loss.

Securities and advisory services offered through LPL Financial, a registered investment advisor, member FINRA/SIPC.